Auction Opening Bids

[Archive]

Posted By: Jay

I was just digging into my pile of unread magazines and I came upon the August 14 edition of Forbes. In it I found an article about an auction site that runs auctions for various charities. The interesting thing is that the site's marketing director embarked on a joint project with an assistant professor from the Harvard Business School to identify what affects an auction's success. Although the article does not go into all their findings, it does mention one suggestion that they make---Set Higher Opening Bids. They note that while lower opening bids tend to whip up a frenzy, these lower opening bids do not generate the highest prices. This seems to fly in the face of the policies of several major auction houses who start lots at tiny fractions of the lot's true value. What do you guys/gals think of this?